Executive Intelligence Review
Subscribe to EIR

PRESS RELEASE


Li-Medvedev Meetings Begin with Many Agreements, Including Ruble Defense ‘Swap’

Oct. 13, 2014 (EIRNS)—Russia and China signed a strong new combination of economic and financial agreements on the first day of Chinese Prime Minister Li’ Kequiang’s visit to Moscow and meetings with Prime Minister Dmitri Medvedev. Unexpected among them, but very important, was a currency swap agreement to be implemented immediately, and clearly for defense of the ruble against ongoing and serious financial war.

The currency swap agreement, actually announced simultaneous to the visit by the People’s Bank of China, is equivalent to 150 billion Chinese yuan or about $25 billion. This compares to $6 billion spent so far in 2014 by the Russian central bank in ruble-support operations, so it is a large capability. Speculative attacks against the ruble have driven it down to a record low below 45/dollar, and this has been associated with increased capital flight. The cause has not been the NATO sanctions, but the "Saudi sanction"

In some of the other agreements signed, RIA Novosti reports: Three Russian banks hit by Western sanctions—Vnesheconombank, VTB and Rosselkhozbank—got financing from the Exim Bank of China; an MOU for high-speed rail networks was signed by Russian Railways, China Railway Construction Corporation, Russian Transport Ministry and China’s National Development and Reform Commission; the State Grid Corporation of China (SGCC) and JSC Russian Grids signed an agreement on cooperation on the construction and reconstruction of new power grids; and Russia’s Federal Space Agency (Roscosmos) and the Commission on the Chinese satellite navigation system signed an important cooperation agreement on global navigation systems. In addition, Russia’s Rosatom will essentially carry through the construction of all eight nuclear reactor units at China’s Tianwan complex, of which it has already built two and started on two more.